Shaanxi Yanchang Petroleum Group Pipeline Transportation Company was established on December 21st, 2005, according to the “Reconstruction Plan of Northern Shaanxi Petroleum Enterprises” issued by Shaanxi People’s Provincial Government and CCP Commission of Shaanxi Province. It is one of the directly subordinated companies Shaanxi Yanchang Petroleum (Group) Co. Ltd. Its’ main businesses include crude oil exploitation and allotment, oil pipeline transportation and pipeline construction. There are ten administrative offices, five section offices, four manufacturing offices and four project construction headquarters(including the newly established Construction Headquarter of Product Oil). Altogether there are 1,009 employees, including 682 full-time workers and 327 part-time or contractual workers.

At present, the Company owns eleven pipelines for crude oil and product oil transportation, ranging 573.6 km from Yongping to Yaodian (four pipelines at Tong Goufu), Chuankou to Yaodian, Gan Guyi to Yaodian, Dingbian to Jingbian, Jingbian to Yulin, Shuanghe to Shunning, Qi Licun to Yaodian, Zibei to Yonglian, crossing via eight counties, namely Dingbian, Jingbian, Hengshan, Yuyang District of Yulin, and Yanchuan, Yanchang, Zhidan, and Baota District of Yanan. The pipeline transportation capacity reaches 3,500,000 tons per year for crude oil and 2,500,000 tons for product oil. There are another four transportation pipelines under construction from Wuqi to Yanan Refinery Factory, Ansai to Yongping Refinery Factory, Yanan Refinery Factory to Xi’an and Xiaohe, and Tian Ziwan to Yulin Refinery Factory. In 2007,the annual gross volume of crude oil being transported amounted to 4,441,000 tons, and product oil being transported reached to 2,256,000 tons, which well assured the production balance of the upstream and downstream sectors of the Group. In 2008, the Company plans to transport 6,000,000 tons of crude oil and 2,380,000 tons of product oil.

During the “Eleventh Five-year Plan”, the Company plans to invest 2,940,755,000 yuan in the construction of five transportation pipelines for crude oil and product oil, ranging 1,200 km in total, hoping to establish the strategic pipeline network with its northern end at Yulin, southern end at Xi’an, and western end at Dingbian. By then, the pipeline transportation capacity for crude oil will reach to 15,000,000 tons per year, increasing by fourfold, and 8,500,000 tons per year for product oil, increasing by threefold, with employees amounting to 1,600 to 2,000 and oil pipeline transportation rate reaching 90%, so as to achieve the goal of primary route pipeline transportation and gradually eliminate road transportation. As a result, 598,000,000 yuan of transportation cost will be saved annually, which is beneficial both economically and socially.